Understanding Electricity Supply Chain
Let’s take a minute to understand the key elements that are responsible for the delivery of electricity to the consumer door step. These elements are: generation, transmission and distribution (T&D), customer service, regulatory policy & affairs & government. These components form the electricity value chain and at each step there is an added cost but also employment opportunities, and value in the electricity that is delivered to the end user. Understanding these elements will allow us to level set the expectations for what we can expect from those who have made a choice to engage in the electricity sector.
1. Generation: Electricity may be produced by coal, hydro, wind, solar, renewable biomass, nuclear, diesel and heavy fuel generators, and countless other means. Generating electricity is not an issue, generating it in efficient large affordable quantity is the issue and moving that larger quantity across a wired or cabled infrastructure is even more complex.
a. Liberia Hydro-Generation: Currently there are three or four hydro-generation facilities. One owned by Firestone (4MW); another by the Liberia Agricultural Company (1.25MW); Mt. Coffee Hydro (8MW Dry Season, 64MW Wet Season), owned and operated by LEC;Yandahun Plant (unknown). Liberia has many rivers that run through it with the potential for providing more electricity. If the rehabilitation of the 64MW Mt. Coffee cost an estimated $300 million, how much would it cost to build another one of equal or greater caliber? Hydro seems to be the most affordable because of the international donor support and backing. One could build smaller hydro dams but now you have to run across all of Liberia maintaining and managing them. I am not against Hydro but there are huge costs, lead time, environmental implications, a tie to the international donor organizations (IDO); not to mention, the power we received from them will vary significantlybetween the dry and wet seasons. Although this may not be a popular view, a hydro generating facility impacts mother nature’s water flow and can have a negative impact downstream and upstream, not to mention the cost to build. Currently in the U.S. there is a push to actually decommission and demolish several hydro dams for environmental reasons. Feel free to research and read up on other generation sources.
2. Transmission and Distribution (T&D): This is the infrastructure that allows electricity to move from generation to the consumer where it is needed. These are the power lines that you see with the connection to homes, businesses, schools, government buildings, etc… No section of the electricity elements demands more attention and impacts the consumers more than T&D. This is the life blood of any electricity utility company. It is not only the heart but it is also the brain and the spine, a very critical element and, if you get this formula wrong, the impact to the consumer is felt instantaneously.
a. Transmission: For the purpose of simplification, let’s separate transmission lines in four categories. In addition, electricity voltage can be powered up or down to a high or low voltage via transformers and substations.
i. High Power Voltage Line: This is your 225kV line, used for electricity to travel over long distance. Basically this is the transmission line that is use by the West African Power Pool (WAPP) to interconnect electricity for trading across countries mainly Cote D’Ivoire, Liberia, Sierra Leone and Guinea. This line carries a high construction cost to build. The higher voltage transmission is more efficient than low-voltage transmission over long distances, because the loss caused by conductor resistance decreases as the voltage increases. In developed nations, because power may have to travel over further distance, they have introduced a much higher voltage line but that is not relevant in the Liberia electricity context. Key thing to keep in mind is that you lose electricity as it travels through the lines. This is one of the reasons there is a difference between what is generated and what is delivered. Just like a gas tank will hold less gas after a trip from Monrovia to Kakata.
ii. Medium Power Voltage Line: Theseare your 66KV lines or the 33KV lines. These lines are also referred to as the sub-transmission lines and it are used to transmit power throughout Monrovia in loops or rings. They are more economically affordable to drop from the medium power voltage line to the lower power voltage line at a central point, than to drop from the high power voltage line of 225KV to the distribution of 22kV or to the consumable voltage of 110V or 220V for each connection because you need a higher cost transformer and substation equipment at each connection point, hence the reason for the gradual step down in power. In addition, transmitting power at the medium 33kV reduces the amount of power that is lost in transmission. This medium power can also handle more load when more electricity is consumed.
iii. Low Power Voltage Line: This is your 22KV line, 33kV lines also fit in this category depending on the area of connection and the industry that it is servicing. The 22kV line goes into another transformer that is more affordable and more common and it is then stepped down to the daily consumable rate of 110V or 220V.
iv. Consumable Low Power Voltage Line: This is your 110V or 220V. When we talk about safe electricity this is why either 110V or 220V is most applicable. I am not advocating that one should put their hand on a live wire. There is a belief out there that at 110V your muscles react and your instincts kick in and you jerk away, whereas at 220V it shocks you and your body immediately clamps up and one may not be able to pull away. My advice to the readers is simply stay away from any exposed wire. The benefits of 110V is that less electricity is lost, and it allows for the use of more affordable wiring when you are wiring your home. The purpose of this article, however, is not to argue about which voltage Liberia should use for daily consumption.
b. Substation: Substations are electrical infrastructures that are used to economically step up or down the power and reroute that power to any one of the above listed categories line. This centralized approach is required for power transformation and transmitting efficiency. Key takeaway from this is that a substation that is required to step down a high power voltage line to a consumer low power voltage line, has cost implications and requires an innovative, safe, affordable, and reliable solution. “For instance, in some remote areas such as Grand Kru, Maryland, Grand Gedeh, and Sinoe where these counties are far away from any current, planned substations in the CLSG Regional Transmission Line build a cost effective connection may present some challenges. (Liberia: Inputs to the Energy Access Action Plan, 2012 – 2030).”
i. Transmission and Substation Cost: In the Inputs to the Energy Access Action Plan 2012-2030 report the estimated “cost for both the transmission and substation construction for Phase 1, which runs from the period 2012 to 2016 and encompasses: a) Paynesville to Airport; b) Monrovia to Kakata; c) Monrovia to Bomi Hills; cost is estimated at $101 Million. Phase 2 from 2016-2020 estimated at $20 Million; Phase 3 from 2021-2025 estimated at $22 Million; and Phase 4 from 2026-2030 estimated at $34 Million; the last phase ensures all of Liberia will be connected. So over the next 17 years the estimated spend for the transmission and distribution system will be about $200 million.” Please keep in mind that this does not include the cost of bringing Mt. Coffee Hydro online. To be sure we did encounter 10-15 months of delay with the Ebola Crisis which definitely impacted the electricity plan for Liberia. Phase 1 has started back again and construction has restarted. The standard industrial cost to lay out 1 mile of transmission line cost about $2 million dollars. The average cost to build a 130KV – 230KV substation is around $0.9 to 5 million depending on how much load and work you require from the substation.
3. Customer Service: Responsible for billing, receivables, community work, and connections, customer metering and maintenance, safety and industrial standards.
4. Regulatory, Policy & Affairs: Responsible for making sure utility company is compliant with all of the rules and regulations per the electricity regulatory commission. Ensure that all filings are done in a timely manner and that all inquiries are responded to with accuracy and in a timely manner.
5. Management: Oversee all of the operations and make sure that the electricity company is operating at the most efficient level to ensure safe, reliable, and affordable electricity. Employee training and development.
These business units add value and are essential to the electricity business but they also have a value added cost. The two high cost areas that are major constraints to delivering electricity to the consumer are the cost to generate and the cost of building and maintaining the transmission and distribution grid. To be sure each of these elements may stand as their own individual business unit or be a private entity, or a combination of private and public partnership. They may also be state owned and operated, as LEC is currently.
Within all these complexities there are designated stakeholders with a passion and resolve to tackle this elephant one bite at a time and begin to wrap their arms around the issues that are the cause for this elusiveness and there is work being done, just at a slow pace.
Work Cited and Research Articles
1. West African Power Pool: Environmental and Social Impact Assessment (ESIA)
2. Ministry of Lands, Mines & Energy: Energy Briefing for Partners (Power Point Presentation for Partners)
3. Energypedia: https://energypedia.info/wiki/Main_Page
4. Electric Reliability Council of Texas: http://www.ercot.com/mktinfo/
5. Electricity Local: http://www.electricitylocal.com/states/california/los-angeles/
6. Global Subsidies Initiative:“A Citizen’s Guide to Energy Subsidies In Nigeria;” produced by Center for Public Policy Alternative (CPPA) and the international Institute for Sustainable Development’s Global Subsidies Initiative. https://www.iisd.org/gsi/resources/introductions-non-experts/citizens-guide-energy-subsidies-nigeria
About the Author: William Thomas Bernard King works for Southern California Edison (SCE), one of the largest private electricity utility companies in the United States and the company with the biggest renewable energy portfolio. In 2014 SCE delivered 17.7 billion kWh of renewable, roughly 24% of all the electricity delivered. William’s 10 years at SCE has afforded him the opportunity to comprehend the business of electricity and the constraints of providing safe, reliable, and affordable electricity. He frequently visits Liberia to see his family and in 2012 spent 3 months visiting and exploring the country. If you would like to share a comment with William, his email is: [email protected]